Answer the following questions using the information below: Rockhampton Manufacturing is approached by a Brazilian customer to fulfil a one-time-only special order for a product similar to one offered to domestic customers. Rockhampton Manufacturing has a policy of adding a 10% mark-up to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers: $\begin{array}{lr} \text {Variable costs:}\\ \text { Direct materials } & \$ 30 \\ \text { Direct labour } & 10 \\ \text { Manufacturing overhead } & 15 \\ \text { Marketing costs } & 5\\ \text { Fixed costs: }\\ \quad \text { Manufacturing overhead } & 100 \\ \quad \text { Marketing costs } & \underline{20} \\ \text { Total costs } & 180 \\ \text { Mark-up }(10 \%) & 18 \\ \text { Estimated selling price } & \underline{ \$ 198} \end{array}$ -For Rockhampton Manufacturing,what is the minimum acceptable price of this one-time-only special order?

A) $66 B) $40 C) $60 D) $55 A) $66 B) $40 C) $60 D) $55

Answer the following questions using the information below: Eucalyptus Products manufactures office desks.Eucalyptus Products has a policy of adding a 20% mark-up to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month: \[\begin{array} { l r l } \text { Output units } & 30000 & \text { tables } \\ \text { Machine-hours } & 8000 \text { hours } \\ \text { Direct manufacturing labour-hours } & 10000 \text { hours } \\ & & \\ \text { Direct materials per unit } & \$ 50 \\ \text { Direct manufacturing labour per hour } & \$ 6 \\ \text { Variable manufacturing overhead costs } & \$ 161250 \\ \text { Fixed manufacturing overhead costs } & \$ 600000 \\ \text { Product and process design costs } & \$ 450000 \\ \text { Marketing and distribution costs } & \$ 562500 \end{array}\] -For long-run pricing of the office desks,what price will MOST likely be used by Eucalyptus?

A) $80.85 B) $67.38 C) $111.13 D) $133.35 A) $80.85 B) $67.38 C) $111.13 D) $133.35

Answer the following questions using the information below: Bondi Corporation budgeted the following costs for the production of its unicycle for 2017. \[\begin{array} { l r } \text { Direct materials } & \$ 562500 \\ \text { Direct labour } & 390000 \\ \text { Manufacturing overhead } & \\ \text { Variable } & 420000 \\ \text { Fixed } & 322500 \\ \text { Selling and administrative } & \\ \text { Variable } & 180000 \\ \text { Fixed } & \underline{ 240000} \\ \text { Total costs } & \underline{ \$ 2115000} \end{array}\] Bondi has an annual target operating profit of $450 000. -The mark-up percentage for setting prices as a percentage of total manufacturing costs is:

A) 51% B) 125% C) 245% D) 185% A) 51% B) 125% C) 245% D) 185%

Exam 9: Pricing and Customer Profitability

Answer the following questions using the information below: Cairns Company has invested $2 000 000 in a plant to make spear guns for fishing.The target operating profit desired from the plant is $300 000 annually.The company plans annual sales of 1500 spear guns at a selling price of $2000 each. -What is the mark-up percentage as a percentage of cost for Cairns Company?

(Multiple Choice)

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Question 161

The mark-up percentage is usually higher if the cost base used is:

(Multiple Choice)

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Question 162

Customer actions will LEAST affect:

(Multiple Choice)

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Question 163

'Price discrimination' is the illegal practice of charging some customers a higher price than is charged to other customers.

(True/False)

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Question 164

Determining a target price can be difficult in markets where products are differentiated from one another.

(True/False)

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Question 165

Answer the following questions using the information below: Rockhampton Manufacturing is approached by a Brazilian customer to fulfil a one-time-only special order for a product similar to one offered to domestic customers. Rockhampton Manufacturing has a policy of adding a 10% mark-up to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials \ 30 Direct labour 10 Manufacturing overhead 15 Marketing costs 5 Fixed costs: Manufacturing overhead 100 Marketing costs Total costs 180 Mark-up (10\%) 18 Estimated selling price -For Rockhampton Manufacturing,what is the minimum acceptable price of this one-time-only special order?

(Multiple Choice)

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(73)

Question 166

Allocating all ________ costs motivates division managers to examine how corporate costs are planned and controlled.

(Multiple Choice)

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Question 167

Answer the following questions using the information below: Eucalyptus Products manufactures office desks.Eucalyptus Products has a policy of adding a 20% mark-up to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month: Output units 30000 tables Machine-hours 8000 hours Direct manufacturing labour-hours 10000 hours Direct materials per unit \ 50 Direct manufacturing labour per hour \ 6 Variable manufacturing overhead costs \ 161250 Fixed manufacturing overhead costs \ 600000 Product and process design costs \ 450000 Marketing and distribution costs \ 562500 -For long-run pricing of the office desks,what price will MOST likely be used by Eucalyptus?

(Multiple Choice)

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Question 168

Which item is NOT a category in the customer-cost hierarchy?

(Multiple Choice)

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Question 169

Cost bases that include fewer costs also have lower mark-ups.

(True/False)

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Question 170

Answer the following questions using the information below: Bondi Corporation budgeted the following costs for the production of its unicycle for 2017. Direct materials \ 562500 Direct labour 390000 Manufacturing overhead Variable 420000 Fixed 322500 Selling and administrative Variable 180000 Fixed Total costs Bondi has an annual target operating profit of $450 000. -The mark-up percentage for setting prices as a percentage of total manufacturing costs is:

(Multiple Choice)

4.9/5

(90)

Question 171

The mark-up percentage is usually higher if the cost base used is:

Customer actions will LEAST affect:

'Price discrimination' is the illegal practice of charging some customers a higher price than is charged to other customers.

Determining a target price can be difficult in markets where products are differentiated from one another.

Allocating all ________ costs motivates division managers to examine how corporate costs are planned and controlled.

Which item is NOT a category in the customer-cost hierarchy?

Cost bases that include fewer costs also have lower mark-ups.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

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